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Key Points:

The Department of Internal Affairs has asked the High Court to fine three men who set up a major international spamming operation which involved sending millions of emails selling sex toys.

The men, courier Roland Smits and brothers Shane and Lance Atkinson - who have already been exposed as scammers here and overseas - sent more than two million emails to New Zealand addresses between September 5 and December 31, 2007. They earned sales commissions of more than US$2 million ($3.3 million).

Shane Atkinson had earlier said he had given up spamming but, following an investigation into the men's operation by a BBC reporter last year, New Zealand police raided four properties in Christchurch and seized 22 computers in December.

Internal Affairs, in its statement of claim filed in the High Court at Christchurch yesterday, alleges the emails marketed pharmaceutical products Herbal King, Elite Herbal and Express Herbal which were manufactured and shipped by Tulip Lab of India, through a business known as the Genbucks Affiliate Programme.

This business was operated by Genbucks Ltd, a company incorporated in the Republic of Mauritius, an island off the coast of Africa.

Internal Affairs alleges Shane Atkinson was co-manager of the Genbucks Affiliate Programme and his brother, trading under the name of Sancash, recruited and paid spammers to market the products - sex toys and replica watches.

Roland Smits registered the internet domain names used in the Sancash spam emails and created alternative subject lines used to avoid interception by internet service providers' spam filtering software.

The trio now have 30 days to file a statement of defence and at a defended hearing a judge will decide whether to impose the $200,000 fine, suggested by the department, on each of the men. The case is in the court's civil jurisdiction, not criminal, so the men cannot be imprisoned.

The suit is the first under New Zealand's anti-spam law - the Unsolicited Electronic Messages Act, on September 5, 2007.

A separate spamming operation run by Shane Atkinson in 2003 advertised penis-enlargement pills, sending up to 100 million messages on a "good day". The actual spamming was done by a 15 year-old boy in the United States. He was exposed by the Herald in 2003 but New Zealand had no anti-spamming laws to deal with it then.

United States Federal Trade Commission has filed its own complaint in court against Lance Atkinson, his Australian company, Inet Ventures Pty Ltd, an American citizen and three US companies over other spamming activities.